The Russell Reynolds survey also looked at seven other
domestic sectors to see what was hot and what was not in
2004. Some of the highlights include:

In General Management, governance controls are
hot, while bravado and excess are not.

In Alternative Investments, registered hedge funds
are hot, while lack of transparency and single-star
management is not.

With Fixed-Income Portfolio Management, European
and emerging markets are hot, while municipal bond
managers and investment grade corporates are not.

Bonus compensation was also up, although only
moderately, according to the fifth annual Investment
Management Recruiting Trends Survey. Executives only
reported increases of 10% -15% in bonuses, usually given in
restricted stock and deferred compensation vehicles.
Compensation overall is up 10% -20% on average for
executives, the survey said. Both compensation and bonuses
are geared towards long-term retention and incentive
rewards on the whole.

The survey also showed that the investment management
industry is experiencing one of the most competitive job
markets in years, with asset manager recruitment activity
up 12%-15% over last year. Equity portfolio management has
seen a shift in hiring practices, with the replacement
hiring practice of years past being replaced by expansion
hiring practices in 2004. Some of the most aggressive
hiring was seen in non-US money management subsidiaries,
which helped raise salaries in the industry, according to
the survey.

On the other hand, mutual fund manager hiring is off
from previous years, almost certainly the result of the
market timing and late trading scandal that hit the
industry last September.

One interesting fact: while about 50% of CEO hires came
from within a company in 2004, 85% of CIO recruitments were
external hires.

Many top managers were drawn away by less-regulated
investment firms – such as hedge funds – in 2004, according
to the survey. Recruitment in this area has focused on
general management, operations and compliance as
alternative investment vehicles – and more specifically,
hedge funds – react to impending regulation by the
Securities and Exchange Commission (SEC). However, the
survey noted that some hedge fund executives, noting their
inability to satisfy continuing investor demands for
above-par returns, are moving back to the buy-side.